Are declared variables a bad thing?

[Tim Finney]

Dear XQueryers,

This is a philosophical question.

Once during my computer studies I was told (paraphrasing) "Global
variables are bad. Bad, bad, BAD!"

Why? It is bad style, making for buggy, opaque code and harder program
maintenance.

XQuery has the variable declaration block. Whenever I declare a variable
there, memories of the old injunction come back--"Bad, bad, BAD!" In an
effort to maintain self-respect as a programmer, I do perverse things
like write functions to get at declared variables so that notional
future programmers will be able to better understand my code. 

Did the Makers of XQuery forget their computer science lessons when they
came up with the variable declaration block? Is it bad style in the
XQuery world to use declared variables directly in functions and
queries? Is this a case of needing to forget wisdom from the procedural
world? Are declared variables a good and necessary thing in the
functional world?

Yours,

Tim Finney